Recently economic theories of fertility have drawn attention to the financial consequences of bearing children, especially the reductions in wife's employment and in family income. These "opportunity costs," together with husband's income, are the major determinants of a couple's ability to afford children which is assumed to be an important cause of family size. The proposed research will use nine annual interviews from a national longitudinal survey to investigate the complex dynamic relationships between income and family size. The research has three specific aims: l. Estimate the opportunity costs of a baby. Costs are measured in terms of wife's and husband's hours of housework and employment, paid childcare, family income, and savings. 2. Investigate whether decisions about family size depend partly on the couple's ability to afford children. In particular, is family income a cause as well as a consequence of family size, and is income related to the timing of births? 3. Estimate the effects of family background and age at marriage on both fertility and family income among young, recently married couples. "Family background" includes factors such as parents' income, father's achievement motivation and family size, and mother's work history and attitudes towards employment.